Panel study shows that international remittances significantly enhance economic growth in Sub-Saharan African nations, indicating the vital developmental role of cross-border financial inflows.
International remittances are becoming an increasingly important source of foreign capital for developing countries, being the third most significant source of capital inflows following export earnings and official development assistant, with a great potential to affect Economic Growth. Despite the rising inflow of international remittances to the Sub-Saharan African (SSA) countries, there is a dearth of empirical literature on the link between remittances and economic growth in the region. This study examined the impact of international remittances on Economic Growth in Sub Saharan Africa. The study employed a panel data of 26 SSA countries for the period 1990 to 2024. The study found that international remittance is positively and significantly related with economic growth in Sub Saharan Africa countries at 1% level of significance. This implies that remittance inflows are linked to economic growth through higher incomes, better consumption, education, and productive investment. The labor force participation, money supply, exchange rate, and gross capital formation have positive effects on economic growth while trade openness has a negative relationship with economic growth in SSA. Governments should enhance formal remittance channels, increase financial inclusion, and motivate the recipients to channel the remittances into productive areas such as agriculture and manufacturing.
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Jama et al. (2026) studied this question.
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